HEALTH CARE/Joan Retsinas

The Dilemma of a Believer

True believers understand the perils of faith. The "Way," however
you define it, is not necessarily the easiest path, or the most
popular path, or even the most expedient one. Sirens will sing their
songs -- of ease, popularity, expedience -- to lure believers. The
most ardent worshippers will sometimes stray.

For believers in the private sector, the tale of the Medicare HMO
marketplace is a kind of Abraham-in-the-wilderness challenge.
Believers in the primacy of the private sector see these
organizations as far superior to anything organized by big
government. (True believers abhor big government). Their credo holds
that the private sector is inherently more efficient -- and
profitable. At this altar, profits are a sacrosanct talisman.

This congressional session, believers are being asked to
compromise their faith.

The tale begins in mid-20th century with the surge of health
maintenance organizations. Established largely by non-profit
organizations, these HMOs required employers to pay a capitated
payment per employee. In return for that money, the HMOs promised to
take care of employees' health. HMOs featured preventive care,
including immunizations and screenings, as well as triage-systems
that relied on primary care physicians (and nurses) to funnel
patients to specialists. Also, these systems generally employed
board-certified physicians who followed established treatment
guidelines.

For-profit HMOs recognized the possibilities of such an enclosed
system: if the HMO could care for people at a lower cost than
employers paid under a traditional system, the HMO could profit. Many
of the cost-cutting (profit-generating) measures helped both the
patients' wellbeing and corporate bottom lines: preventive care,
limited formularies, emphasis on primary care physicians,
restrictions on emergency room visits, though patients railed against
some of the more egregious cost-cutting moves, like same-day
mastectomies, "gag" rules that kept physicians from discussing all
possible treatments, and arbitrary "denials" of payment. At times,
measures that enhanced corporate health harmed employees' health. Yet
the notion of an integrated system, with a primary care physician at
the entranceway, remained valid.

From inception, Medicare followed the traditional insurance
model, leaving patients free to pick their physicians, including
specialists; and Medicare imposed minimal practice restrictions on
physicians. It did not limit visits to specialists.

By the end of the last century, though, many working people
belonged to HMOs. Why not let those people continue in that system,
once they retired? And why not introduce into Medicare the same
option for HMOs that had proven profitable for the working
population?

Medicare HMOs came into being. They were private sector,
for-profit entities. And they promised to take care of enrollees'
health -- indeed, they promised a richer benefits package (many
included coverage for pharmaceuticals) at a lower cost to
enrollees.

True believers in the private market cheered. They hoped to
shrink "traditional" Medicare, as more and more Americans opted into
HMOs.

Today about 18% of Medicare enrollees belong to an HMO.

The problem is costs: these private-sector plans cost taxpayers
more than "traditional" Medicare. Democrats in Congress want to
reduce that differential.

No surprise: the HMOs are lobbying to save their subsidy. They
argue that under a reduced payment scheme, some HMOs would close, or
withdraw from some markets, abandoning enrollees. Those HMOs are
correct: in the past, some HMOs have withdrawn from markets. An HMO
is a business and businesses do expand and contract, depending upon
their bottom-line numbers.

Believers, though, confront a challenge to faith. On the one
hand, if they honor the rule of profits, and ask that Medicare HMOs
cost no more than traditional "big government" Medicare, then they
may be shrinking the Medicare HMO sector. In short, they will be
pushing Americans out of private-sector plans, into the arms of
government insurance. On the other hand, if they insist on Uncle
Sam's subsidizing these organizations, the believers are abandoning
the profit-rule that has under-girded their faith. It's apostasy
either way.

Joan Retsinas is a sociologist who writes about health care in
Providence, R.I. Email retsinas@verizon.net.